Cuomo wants more independent contractors to be employees

Governor loath to let California lead on gig-economy law

As California revs up to classify Uber and Lyft drivers as employees, Gov. Andrew Cuomo said Monday he also wants to steer more workers away from "independent contractor" status.

The governor said he hopes to see companies bring people onto their payroll instead of treating them as self-employed, even as he noted the trend in the opposite direction. The Democrat's comments come as the Golden State prepares to pass legislation that will make app-hailed drivers employees of giant firms such as Uber and Lyft—a move that would undermine the tech giants' business models.

"As a matter of policy, we are moving more and more to an economy where nobody's an employee, where there are fewer employees, and companies favor those arrangements because then [workers] don't have benefits," Cuomo said at an unrelated press conference at his Midtown office.

"I think we have to look at how we define 'employee' versus 'independent contractor' going forward, and I think, in my opinion—forget the specifics—more people should be considered employees, because what has been happening is companies have been going out of their way to hire independent contractors to get out of those obligations."

The governor said a Crain's reporter's reference to the California proposal got his "competitive juices flowing."

"I don't want to lag California in anything, I don't want to lag any other state," he said. "I have proposed in the past, and I will propose in the future for workers, and part of that is redefining a worker as an employee as opposed to an independent contractor."

For purposes of worker's compensation, Uber and Lyft drivers in New York are considered employees of the Black Car Fund, a semi-public nonprofit that receives a 2.5% surcharge from all rides and makes payouts to drivers injured on the job. Crain's has reported that the arrival of app-based vehicles in New York had sent the fund's revenues and expenditures soaring—and that a limited liability company controlled by the fund has donated heavily to New York politicians, Cuomo included.

While the fund was created as a workaround so independent contractors would be eligible for worker's compensation, they do not receive many other benefits and protections afforded to full-time employees by labor laws, including minimum wage. New York City recently came up with its own workaround to ensure e-hail drivers in New York City earn the minimum wage, but it does not apply to other gig-economy workers.

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